The Chinese Demographic Crisis: A Downward Spiral

Depicting delinquency towards the 7 billion ‘Happy New Year’ wishes, the year of 2020 is off to a rickety start. Amidst the emergence of issues whose consequences are immediate, visible, and measurable, 2020 has brought to light some of those issues whose magnitude we cannot aptly judge at the moment. The Australian fires, an apparent ‘World War III’, planes being shot down because of “human error” are matters with tangible consequence. But as the world deals with these, in East Asia there lies a country with its own set of unprecedented problems. The People’s Republic of China is being faced with a demographic crisis.


An Overview of the Crisis

With only 14.6 million live births in 2019, approximately 500,000 less than 2018, China’s birth rate is now the lowest it has been since 1949. This is the third consecutive year in which the birth rate has fallen. According to the National Bureau of Statistics (NBS), the number of births in 2019 were 10.48 per 1000 people.

Efforts to head off this crisis, like the removal of the one-child policy, have failed, and China is in for trouble.


Causes Leading to this Crisis

Since 1979, when Deng Xiaoping introduced the ‘One Child Policy’, China has become accustomed to the idea of having only one child per family. This habit has led to families choosing to have only one child despite the revoking of the One Child Policy.

China’s fertility rate is also rapidly receding. There is a lack of female population as people chose to abort the girl child during the time of the One Child Policy.

High costs of schooling, medical care, and housing, despite China’s social security, are reasons cited by Chinese for not wanting children. Additionally, the competitiveness in modern Chinese society is one that many are unwilling to sign up for.

Furthermore, increasing divorce rates as social stigma has lightened, and more women not marrying have also contributed to this crisis.


The Consequences

The fastest, and rather the only, growing segment of the Chinese population, is the elderly. Observing the trend of population shrinkage over the past 5 years, demographers predict that the Chinese population will be 100 million lower by 2040, and that there will be twice as many elderly people as there will be children under 15.

Over the past 25 years, the number of elderly population has increased from 135 million to 325 million, and based on these inclinations, by 2050, one-third of the population will be over 60 years old. The median age in already 38.4.

While China faces a depleting population, India must fight an ever-growing one. However, by 2040, India’s working population will be 200 million more than China’s. China will find it difficult to sustain itself. According to AEI demographics expert, Nicholas Eberstadt, China will have over 24% of its population over 60, while India will only have 12%.

An aging society will further impact an already slowing economy.


Impacts of Older Population

A population consisting of a large number of people over the age of 60 is harmful for the economy in the long run. A study published in the Asian Development Review Analysed effects of growing ageing population on the potential growth of Asian economies over the period of 2015-2020 using quantitative assessment.

Increasing government services consumption due to rise in demand for healthcare will lead to an increase in government expenditure. This will be accompanied by a decline in the aggregate productivity of the country, as focus will shift from the more productive private manufacturing sector to the less profitable service sector.

Furthermore, there will be a clear decline in the labour participation rate and therefore an increase in social security tax. The working force will have to bear the heavy burden of their family’s taxes and service fees.


Thus, it is safe to say that China’s economic security lies in a secure and stable population, which it should immediately adopt measures to create. The unpredictable consequences of this issue combined with several contributing factors such as the climate crisis, epidemics and trade wars must be taken into account to give China adequate reason to work towards solving this matter, urgently.